Reliance Industries’ Marcellus, LLC a wholly-owned subsidiary of Reliance Industries Limited (RIL) will sell its interest in upstream assets in the Marcellus shale play of southwestern Pennsylvania, the company said on Thursday.
These assets, which are currently operated by various affiliates of EQT Corporation (“EQT”), have been agreed to be sold to Northern Oil and Gas (NOG), Inc, a Delaware corporation, for a consideration of $250 million cash and warrants that give entitlement to purchase 3.25 million common shares of NOG at an exercise price of $14.00 per common share in next seven years.
“A Purchase and Sale Agreement has been signed between Reliance Marcellus and NOG on February 3, 2021, for this sale and the transaction is subject to customary terms and conditions of closing,” the company said in the regulatory filing.
RIL had in 2017 sold first of its shale gas ventures—upstream Marcellus shale gas assets in northeastern and central Pennsylvania in the US—for $126 million.
Till 2014, RIL had been bullish on the shale gas segment, however, the drop in crude oil prices since late 2014 hit the valuations of oil and gas assets. Shale gas blocks have suffered far more than conventional oil and gas blocks as they are economically viable only when prices are above a certain threshold.
Reliance Industries had sold a shale oil and gas block in the Marcellus shale in northeastern and central Pennsylvania for $126 million in the year 2017.